1. Field of the Invention
The present invention relates generally to transactions, and more particularly to a method and system for deal structuring.
2. Description of the Background
The structuring of deals for customers has traditionally been a protracted and inefficient process. The customer might provide copious amounts of financial and potential collateral information to a salesperson, who would attempt to structure a deal from a commercial lender to the customer. This process would require the expenditure of large amounts of time on the part of both the customer and the sales person.
The typical loan originating process, for example commences when a potential borrower, i.e. a customer, first contacts a loan salesperson by telephone. The salesperson extracts the information required from the potential borrower to generate a provisional loan, without knowing whether the mortgage loan will meet a lender""s underwriting policies. The salesperson may then request that confirmation information, such as income documentation, be presented.
The information, and all of the paperwork, is then routed to the lender""s processing department, where additional documents, such as credit reports, might be requested and retrieved, either manually or automatically. Eventually, the documents are forwarded to an underwriter, who then determines whether the requested loan meets the lender""s underwriting policies, and whether any further documentation is necessary, and may approve the loan.
If the loan does not meet the lender""s underwriting policies, the underwriter and the salesperson may then negotiate changes to the terms of the loan necessary to meet these policies. After the underwriter and the salesperson agree on the changed terns, the salesperson and the potential borrower must negotiate with respect to the terms agreed on by the underwriter and the salesperson.
Any further amendments agreed to by the potential borrower and the salesperson might require further negotiations between the salesperson and the underwriter, and the loan origination process thus continues iteratively until all parties come to an agreement, all possible loan permutations are rejected, or the potential borrower abandons the process in frustration. If the parties reach an agreement, the process continues through the approval, closing, and servicing stages.
Automated deal processing for customers includes prompting a customer for at least one deal parameter, such as loan amount, prompting the customer for information relating to the customer, such as collateral offered by the customer, accessing in real-time information relating to the credit history of the customer, applying a plurality of origination rules, such as exclusionary rules, pricing rules, risk rules, and edit preference rules, to the at least one deal parameter and the information relating to the customer, applying at least one strategy, such as compensation for risk, repair, or upsell, to the results of the application of the rules, generating at least one deal based on the accessing and applying of the strategy, and presenting the customer with the at least one option. In a preferred embodiment, the automated process of deal structuring is based on the needs and/or the preferences of the customer.
The automated process of deal structuring offers many benefits to both a deal offeror, such as a lender, for example, and a customer, such as a potential borrower. For the offeror, i.e. the lender, the benefits include leveraging the skills of the lender""s experienced loan officers by utilizing computers to handle data entry chores, to apply underwriting rules, to perform repetitive calculations, and to store all data relating to a potential borrower for later use, thereby freeing the loan officers to time additional or other matters. Additionally, an automated process ensures consistent application of rules to each deal attempted under the automated system, and allows for consistent explanations of the benefits of deals structured. Moreover, the automated process provides guidance to less experienced loan officers who might otherwise initially suggest terms unacceptable to the lender""s underwriters, wasting the time of the loan officers, the underwriters, and the potential borrowers.
The automated process of deal structuring benefits the potential borrower by providing the ability to easily explore different deal scenarios, as well as greatly reducing the amount of time required to obtain approval of a mortgage loan. Additionally, the customer may be offered options which a loan officer might not have developed manually, and may benefit from a greater number of offerors, such as lenders, to which the automated process has access, but a loan officer would not.